Kuroda: Further Fall OF Deposit Rate Is ‘Technically Possible’

02/29/2016

Bank Of Japan’s governor is apprehensive about a further fall in deposit rate.

According to a statement of the Bank of Japan’s governor, Haruhiko Kuroda there is a possibility of its deposit rate to tread “further” into “negative territory”. The said statement came on Friday, the 26th February 2016, whereby Mr. Kuroda expressed that “further” negative deposit rate could be a technical possibility, while he also assured that he was not quite clear to its extent.

Nevertheless, Mr. Kuroda would be assessing the data first as to see how the reduction of deposit rate to “0.1%” that was carried out in the beginning of February 2016 actually “worked through the economy”.

Moreover, while speaking in a parliament’s session, the governor of the Bank of Japan stated: "It is technically possible to implement a larger negative rate, although I couldn’t say with certainty how far we can go. In any case, at this stage, I’d like to closely examine the degree by which our recently decided minus 0.1% rate has filtered through.”

In fact, he also highlighted the fact that “such decisions” will impinge into the well being of banks on a commercial scale. Additionally, he also drew the audience’s attention to the much loss made which is proportionate to the holding back period of cash in the “form of bank notes”.